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bonus rate treatment of ISA interest transfers
An ISA provider has advised me that, when transferring out an ISA, the interest earned is not allocated to any specific tax year.
I have an ISA with £20k contributions in each of the 25/26 and current tax years. In 2025/26 it earned £800 interest. If rates stay the same I expect around £1800 this tax year.
When the bonus rate "war" (for new customers & current year funds) starts next early in 2027 and I transfer the entire fund to a new provider I realise the £20k from 25/26 will probably not be eligible for the bonus, but the current years £20k could be eligible.
Has anyone any experience of how the interest would be treated by the new provider?
Would any of the interest be allocated the bonus rate? Or just the £1800 earned this tax year? Or the entire £2600?
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Comments
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Which provider? They may not all have the same policy.
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